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Edited version of private advice
Authorisation Number: 1051558059632
Date of advice: 31 July 2019
Ruling
Subject: Income Tax - assessable income
Question:
Are the payments you received for caring for your grandchildren assessable income?
Answer
No. The payments you received for caring for your grandchildren is not ordinary income and is therefore not assessable under subsection 6-5(2) of the ITAA 1997.
These payments are considered a gift that has occurred from a domestic family arrangement.
This ruling applies for the following periods:
Year ended 30 June 20XX
Year ending 30 June 20XX
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
You care for your grandchildren while their parents are working.
The parents work a lot of day and night shifts and there is no night childcare available.
Given the work commitments of the parents you offered to help care for the children while they are working.
You care for the children in your own house.
You take the children to school, cook for them and take them on outings during school holidays.
The parents paid you $X in 20XX (for half year) and $X for the entire 20XX year.
The parents made these payments as a gift and kind gesture for your generous time that you have invested in looking after your grandchildren.
The payments are made fortnightly.
The payments cover some of your living expenses plus costs involved in looking after the children (food, petrol, activities).
You would care for the children regardless of any payment.
There is no formal agreement for the babysitting and care you provide your grandchildren.
You do not have a set routine or specific times to care for your grandchildren. Both parents undertake irregular shift work so you care for the children whenever it is needed.
You do not work and you are not a pensioner.
You do not babysit or care for any other children and you are not a registered child carer.
Relevant legislative provisions
Income Tax Assessment Act 1997 subsection 6-5(2)
Taxation Ruling IT 2167
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